Mitt Romney lies about Jeep moving to ChinaRepublican presidential candidate Mitt Romney told a crowd in Defiance, Ohio, on Thursday that Chrysler was considering moving "all production" of its iconic Jeep lineup to China.

That's the kind of line that you can expect to fire up a crowd on the campaign trail, especially a crowd in a town like Defiance, which is home to a General Motors (GM) factory.

There's just one problem: It's not true.

Yes, Chrysler Might Build Jeeps in China. But ...

Here's what is true: Chrysler is indeed considering a plan to make Jeeps in China. But it's not planning to send those Jeeps to the U.S. to sell -- and it's definitely not planning to close the factories that currently make Jeeps in Michigan, Illinois, and Ohio.

Why would Chrysler want to make Jeeps in China? Lots of reasons, but one big one in particular: China places heavy taxes on imported cars and trucks. Non-Chinese automakers that want to do business in China's booming auto market are almost always better off building their cars and trucks locally.

Nearly all of the automakers you've ever heard of are either building cars in China already or making plans to do so.

Build Globally, Sell Locally

Ford (F), for instance, has recently invested about $5 billion to build several new factories in China. A couple of those plants are already open and thriving. The Ford Focus, for example, has become one of China's best-selling cars.

Yes, Ford builds the Focus in China -- and in Russia, Thailand, and Germany. But the Focuses you see at your local Ford dealer here in the U.S. were all built in Michigan. That's because Ford, like many automakers, finds it cost-effective to build its cars close to the people who will be buying them.

This is exactly what Chrysler is talking about doing with Jeep. Chinese consumers have been hot for SUVs lately, and Jeep -- perhaps the world's best-known and most iconic SUV brand -- would love to be able to capture a big piece of that market. And that means building Jeeps in China.

A Little Problem of Reading Comprehension

Romney's confusion (or his staff's) apparently arose from a recent Bloomberg article discussing Chrysler's plans. The beginning of the article is, indeed, a little confusing. But later on in the piece the writer makes it clear that Chrysler's plans involve adding factories in China, rather than shifting production away from the U.S.

Chrysler reacted to Romney's remarks with indignation. The company released a statement late on Thursday that made it clear that "Jeep has no intention of shifting production of its Jeep models out of North America to China." (Those are Chrysler's italics.) Chrysler's PR folks also appeared to chide Romney with this remark at the end of their press release: "A careful and unbiased reading of the Bloomberg take would have saved unnecessary fantasies and extravagant comments."

A Small Gaffe in the Grand Scheme of Things

As gaffes go, Romney's probably doesn't even make the top 10 list for this presidential campaign. In all likelihood, some staffer working quickly made a mistake, and Romney simply ran with it.

It's understandable, but it's also important to set the record straight. Doing business in China -- for any automaker -- doesn't mean giving up on the idea of making cars and trucks in the U.S.

Chrysler is making good profits here in the U.S. Through September, the automaker's U.S. sales were up almost 24% -- proof that its overhauled line of made-in-North-America products is doing well with customers.

Chrysler would love to find new customers in China. Don't be surprised if Chinese buyers learn to love Jeeps the way Americans do. But Chrysler's not going to change what's working so well here at home.

At the time of publication, Motley Fool contributor John Rosevear owned shares of Ford and General Motors. Follow him on Twitter at @jrosevear. The Motley Fool owns shares of Ford. Motley Fool newsletter services have recommended buying shares of General Motors and Ford.

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Fiat SpA (F), majority owner of Chrysler Group LLC, plans to return Jeep output to China and may eventually make all of its models in that country, according to the head of both automakers’ operations in the region.

Fiat is in “very detailed conversations” with its Chinese partner, Guangzhou Automobile Group Co. (2238), about making Jeeps in the world’s largest auto market, said Mike Manley, chief operating officer of Fiat and Chrysler in Asia. Chrysler hasn’t built Jeeps there since before Fiat took control in 2009.

“The volume opportunity for us is very significant,” Manley, who is also president of the Jeep brand, said in an interview at Chrysler’s Auburn Hills, Michigan, headquarters. “We’re reviewing the opportunities within existing capacity” as well as “should we be localizing the entire Jeep portfolio or some of the Jeep portfolio.”

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Either Bloomberg made up the interview, the President of Jeep misspoke, or Chrysler is lying about their intentions. Romney was not wrong about the article he read.

November 04 2012 at 2:41 AM Report abuse rate up rate down Reply
1 reply to patsy.simmons1's comment
Nate Pantumsinchai

You clearly do not understand what the article is saying. When it is written "and may eventually make all of its models in that country" it means that Jeep has a line of models that it has designed of which, all of them might be produced for sale in China. For example, Honda makes many different cars for sale around the world and not all models are available for sale in all countries. Chevrolet does not sell their Camaro or their entire catalog of cars in every country around the world either. The cars they sell in Asian markets are only a small number of models made for local markets. Jeep is thinking that there might be enough demand for them to produce and sell their entire "portfolio" in China FOR China.

November 04 2012 at 6:21 AM Report abuse rate up rate down Reply
Peter Wood

So many dummies out there.

Jeep makes Jeeps in China; for the Chinese. This has no impact on those who makes Jeeps in America for Americans. Jeep is expanding its operations in America; thanks to Obama.

If Romney had his way, Jeep wouldn't be making cars anywhere. Same with the other American cars makers.

November 03 2012 at 10:05 AM Report abuse rate up rate down Reply

Jeep ALREADY imports to China. The Chinese ALREADY love them, at an ever increasing number.

I guess we won't export any more after the factory opens up there, eh?

November 01 2012 at 2:30 PM Report abuse rate up rate down Reply

You blast 'reading comprehension', while completely misrepresenting what Romney said.

November 01 2012 at 2:29 PM Report abuse rate up rate down Reply
Independent in MA

This is no gaffe - it's a campaign strategy. They leave the lie out there as fact & hope that voters believe it. This is deliberate, and it should be embarrassing for him and his campaign, but they have NO SHAME. Between the lies and his ever-shifting positions on almost every issue, it's hard to pin Romney down on anything. I'm an independent voter - when he was governer of MA I didn't like him, but I thought that he was probably a decent person. But after watching this campaign, I realize that he's one of the phoniest, sleaziest blow-dry empty suit politicians to EVER run for office. He will say anything to get your vote, even if it's different from what he told someone else yesterday. Here are just a FEW examples:
- Personhood (including the Blunt Amendment)
- Abortion Rights and Roe VS Wade
- Gay rights
- The Ryan Budget
- Universal health care
- Blind trusts
- Personal tax returns
- Equal pay for equal work
- The auto bailout
- Hiring of teachers, police and firefighters
- Investing in / "cracking down" on China
- Shipping jobs overseas
- Tax cuts/shelters and deductions
- College loans and financing
- Foreign policy (he suddenly sounds like the president!)
- Immigration
- Medicare/Medicaid
- Welfare work requirement issue
- Goverment bailouts (like the ones he took at Bain & the Olympics)
- Bank regulation/deregulation
- His infamous 47% comments caught on tape
- Tax cuts vs defense spending vs the deficit
- Gun control (Romney signed an assault weapons ban in MA, Pres. Obama INCREASED the number of places where gun owners can carry their firearms.)
He even lies about wierd stuff, like:
- Who his immigration advisor is
- His dad "marched" with Dr.. King? (no he did not)
- His primary residence: Utah vs MA (changed this retroactively so he could run for governor)
- When did he "retire" from Bain Capital (changed this retroactively also)
- Does he eat "cheezy grits?"
- His first name (It's Willard - why did he tell Wolf Blitzer that it is Mitt?)
I don't like either party, but Pres. Obama is the clear choice this year. He has worked to keep his promises, and has done a good job considering the fact that the Republican leadership in Congress gave him no cooperation. They have thrown the U.S. economy - and all of us - under the bus in hopes of blaming the president & getting him out of office. They held something like 34 symbolic votes against Obamacare, but they couldn't allow a single vote on any of his jobs bills? I hope everyone remembers this when they go to the polls next week - I know I will.

October 31 2012 at 10:47 AM Report abuse rate up rate down Reply
Tom Morris

In 1980 AMC built factories to make Jeeps in China, end result The Chinese love Jeeps, (I was there last year, still true, bunch of circa 1980 jeeps still running around) So how dumb is it to make factories to build current Jeeps which the chinese will buy. Whats bad is to take a sliver of truth and twist it, how can you trust some one who does that?

October 30 2012 at 9:33 PM Report abuse rate up rate down Reply

Not moving all of them, JUST COME OF THEM!

October 30 2012 at 9:14 PM Report abuse rate up rate down Reply

He never said "all production you lying AOL liberals. Learn to be truthful. It will help you get along better when Romney is president.

October 30 2012 at 5:16 PM Report abuse rate up rate down Reply

Key Word is "all" not moving all it's jeep production to China but it will be starting to move some production to China and gradually when they see the money they save and make they will leave a very small piece Maybe in Toledo.

October 30 2012 at 4:45 PM Report abuse rate up rate down Reply

All you union supporting democrats can high five one another for EVERY american job lost to china , Your greed for more than your deserved slice of the american pie has done more damage to america than all the wars combined . UNIONS are the cancer thats killing america from the inside out .THANKS GREEDY UNION WORKERS !!!!!!.

October 30 2012 at 8:59 AM Report abuse -1 rate up rate down Reply